Photo: Port Moresby CBD.  RNZI / Koro Vaka'uta

Source: Radio New Zealand

Australia's aid programme in Papua New Guinea has been described as having enabled rather than remedied state fraud and market distortions in PNG

The damning indictment came in a submission by the International State Crime Initiative at an Australian senate inquiry into the aid programme in PNG.

The Initiative's Kristian Lasslett says Canberra's approach to aid in PNG centres on the idea that the best way to foster development is through making the country more business-friendly.

But he says that this approach is incongruent with the reality on the ground, where business has too much liberty.

"And when I say liberty, they have the liberty to set prices that are far in excess of the market value of the services and goods they provide; they have the liberty to misappropriate landowner assets, state assets with impunity; they have the liberty to develop completely superfluous projects that are often inflated in price and are not delivered at all or to inadequate quality; they have the liberty, as we've seen in the legal industry, to steal state funds en masse."

The Australian government's strategy for delivering aid in PNG is reportedly based on "extensive consultation with a wide range of stakeholders from PNG and Australia including government, business, civil society and internatinal donors".

However Dr Lasslett contests this claim, saying input is heavily slanted in favour of companies and players in sectors such as mining, oil, gas and oil palm.

Among the State Crime Initiative's recommendations are for Australia's aid programme to provide more support to civil society projects which empower and mobilise PNG grassroots communities.

It also recommends that support be given to develop a free and independent media in PNG.